Glencore Xstrata (LSE:GLEN) is selling its 80 percent stake in a Papua New Guinea copper mine to Australian copper-gold miner PanAust (ASX:PNA).
As per the agreement, PanAust will pay an initial $25 million upon closing of the transaction and another $50 million on the last day of December, 2015. Glencore will receive a 2 percent net smelter return royalty on Pan Aust’s interest in the project, up to US$50 million.
The Australian miner will also acquire a 7.5 percent stake in Highlands Pacific, the minority partner in the Frieda River project, for $4.7 million.
As quoted by the press release:
The acquisition of Frieda River will be consistent with PanAust’s strategy to ensure that it has access to sufficient mineral resources to secure the Company’s sustainable growth beyond the life of its Phu Kham Operation in Laos. The likely timing for implementation of PanAust’s development concept for Frieda River coincides with rising production levels scheduled for Phu Kham.